Mr Canavan said Thunderbird had won funding on its promise to create "intergenerational" job opportunities in the Kimberley, given the mine has an estimated 40-year life.

The project, about 60km west of Derby, is likely to create more than 400 jobs in construction, and Sheffield said it would need a permanent workforce of about 280 people.

The company is still to finalise a full funding deal for the estimated $260 million cost of building the first stage of the mineral sands mine, but the NAIF package will bring the longplanned project significantly closer to fruition.

The $95 million loan from NAIF will help Sheffield fund an accommodation camp at Thunderbird, along with a natural gas power plant and infrastructure upgrades at the Derby port, which the Federal Government hopes will encourage further economic development in the region.

Broome Chamber of Commerce and Industry president Peter Taylor said the loan package was a major step forward for the project.

"This will underpin confidence in "Broome is turning the corner and is very much open for business again."

Sheffield Resources managing director Bruce McFadzean said he was extremely pleased with the level of support shown by the NAIF and Federal Government.

"NAIF support provides for Sheffield to own certain assets like the onsite power generation facility, and for lower operating costs when compared to the Thunderbird BFS," he said.

NAIF is strong on local community benefits, jobs and growth and so are we.

"The role of the Federal Government in backing Thunderbird and Sheffield is also very meaningful to overseas customers and to investors."

Environment Minister Melissa Price - the local Federal member said Sheffield's long-term commitment, and particularly its public commitment to have up to 40 per cent the project's ability to raise the additional equity and funding required for a final investment decision," he said.

"This helps lay the foundations for a broad-based increase in economic activity across the West Kimberley. Aboriginal employment within its first eight years of operation, would be a major boost for the Kimberley.

"All that work and the ongoing mining operation will inject a massive number of jobs into the region and we'll see even more positions supported when local businesses tap into providing services to the mine," she said.